Banks clash over ANZ stance to stay with RBA rate rises

Monday November 2, 2009

ANZ bank's recent statement to remain with the Reserve Bank of Australia's official rate increases when it comes to variable mortgages has received criticism from other major Australian banks, especially from the Commonwealth Bank who is Australia's largest mortgage lender.

To date, it is the ANZ bank that has been the only bank of the big four to promise to remain with the official rate cycle as advised by Prime Minister Kevin Rudd when the rate rises first commenced. However, ANZ bank has since reaffirmed its position, but has left open the clause to move away from this if "something dramatic happened" in the economy or financial markets.

There is speculation of more rate rises over the next week, with predictions of a rise of 50 basis points by the New Year, putting more pressure on Australian banks and their stance on their own rates.

Treasurer Wayne Swan commended the actions of ANZ bank, saying that it will be its customers that will truly benefit from the move.

"I join with ANZ customers in welcoming this decision to do the right thing by the economy and pass on no more than official rate rises from the independent RBA,"

"Any bank that chose to raise rates outside the RBA's official rate cycle can expect a strong backlash from both its customers and the community more generally." Mr Swan said.

Although, critics have noted that ANZ have actually been one of the more hesitant to first begin implements rate cuts back when the Reserve Bank of Australia first started cutting its official rates, according to The Herald Sun.

Of the remaining big four banks, none have committed to remaining within the official rate when it comes to the variable mortgage rate with Westpac and National Australia Bank both saying that while they have no plans to move beyond the Reserve Bank rates, they won't promise not to in the future.

In response to the statements of ANZ, Commonwealth Bank spokesman Steve Batten stated that as majority market holder for home loans, with 31 per cent, the CBA may not be promising to remain with Reserve Bank rates but its track record for offering its customers better value home loans was unquestionable.

"Our actions of providing our customers with the lowest standard variable rate mortgage is evidence of our commitment, and in our opinion these actions speak louder than words," Mr Batten stated in a press conference.

"Commonwealth Bank has had the lowest standard variable rate among the majors for at least 18 months and we will continue to assess our position on rates.

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